The Czech senate has approved unanimously an amendment to the law on support for power production from renewable energy sources which limits state support for solar power generation to those small installations consisting of solar panels attached to buildings.

Under the amendment, new photovoltaic power plants built on agricultural or forest land will no longer be entitled to the support , although existing power plants that supply power to the distribution network will not lose their existing subsidy. But generation for the owner’s consumption will not receive any subsidies.

All the 70 present senators voted in support of the amended bill which represents one of the cabinet’s measures aimed at reducing the profitability of investment in solar power plants and limiting increases in power prices for end customers. the subsidy has proved so effective that early this year, the volume of issued approvals exceeded by several times the capacity which the Czech power grid is able to absorb.

According to the current estimates, electricity prices will rise as of 2011 by 5.5 percent at most. The bill will take effect next year if it is signed into law by the President.

Industry and Trade Minister Martin Kocourek (Civic Democrats, ODS) said approval of the bill will prevent construction of solar power plants with an output of roughly 700 megawatts by 2011, which means the state will save around Kc7.8bn.

The government also wants to introduce a 26 percent tax on solar power and impose a gift tax on carbon credits to prevent growth in power prices.

Under the amended law, operators of new solar power plants that start operation by end-2010 will have 12 months to connect the facilities to the grid. Their entitlement to support will be maintained only if they connect them to the distribution network.

Support for new sources on roofs and walls of buildings with installed peak output not exceeding 30 kW will take effect as of March 1.